Bitcoin Is Not Perfect

Bitcoin reached a new record height as its market price is now more than USD 7000. Despite the fact that hard times are awaiting Bitcoin in the following weeks, it is going to divide again. Technically speaking, the so-called “hard fork” phenomenon is about to happen. It has been already known for a few months that on November 16, the size of the block will grow from 1 MB to 2 MB as a result of changes to the protocol. The problem is the number of people lurking behind this protocol adjustment. In fact, more and more key-figures from the community have been emerging in support of the unadjusted version of Bitcoin. Nevertheless, everything may change days before or immediately after the fork.

Speculations about these developments undoubtedly pushed the price of Bitcoin higher, but the breach of the USD 7,000 limit was primarily triggered by a statement made by CME group, one of the world´s biggest derivatives markets. Beginning next year, CME group wants to enable trading with Bitcoin derivatives. Furthermore, the Korean market, where an arbitration took place due to Bitcoin´s price being 200 USD higher than on other leading markets, contributed slightly to the Bitcoin price increase.

A conference on the present and future of another cryptocurrency – Ethereum – has recently taken place under the title of Devcon, where the main developer of Ethereum introduced their newest visions and intentions. It is important to mention that Ethereum, the cryptocurrency of the probably second richest developer in the cryptoworld, went through some hard times, too. It had to be adjusted and divided due to a faulty protocol which was hijacked by hackers for the purpose of self-enrichment.

Back then, the cryptocurrency divided into the modified version of Ethereum and the original Ethereum Classic. Despite the fork, Ethereum is still the second strongest cryptocurrency in the world. In my opinion, the third division of Bitcoin will not cause anything substantially dangerous, however it is still the most important of the three. Futures of the new cryptocurrency are being traded for ca. USD 1,000, a lot more than the initial trading value of Bitcoin Cash and Bitcoin Gold.

On the other hand, it needs to be emphasized that Ethereum is destined to serve a completely different purpose. Ethereum is more like a platform for new apps based on the Blockchain – a decentralized system. There are only very few places where it is possible to pay by Ethereum. On the contrary, Bitcoin is mainly used as alternative money, with the obvious advantage of being the first cryptocurrency, gaining positive historical points from the original thought of a decentralized currency.

Personally, I am a bit sceptical towards the Bitcoin and more in favour of alternative currencies. My reasons for such preference lie in expensive charges, slow transactions (although still quicker than in the common banking world), and the endless politicization of developers. Should then Bitcoin be a “transaction” currency or a commodity equivalent? This dispute has remained undecided for months now.

Alternative currencies are more flexible, cheaper, and developers are able to make quicker decisions. However, one cannot ignore the fact that Bitcoin is still a definite safe harbor between the vast array of cryptocurrencies, mainly due to the fact that alternative cryptocurrencies, despite their inviting parameters, are not being utilized routinely in day-to-day business while their future remains uncertain.

In the span of this year, a great advancement concerning cryptocurrencies, especially Bitcoin, could have been evidenced amongst the ranks of interested parties. In blunt terms, cryptocurrencies are simply sexy. You can hear the talk of them in bars, stealing the headlines of the news while new projects keep appearing. Yet, it is to be pitied that people merely want to get rich quick and easy. This trend is mostly evident on social networks and media. Users do not ask what Bitcoin is, how it actually works, but all they care about is how much money to invest and where. They share enticing graphs of rapidly increasing curves and glittering green numbers.

Luckily, there is also a part of the community that tirelessly works on the development of cryptocurrencies, which will eventually lead to the creation of new apps and platforms. Those will make the lives of ordinary people better in the long term. At this moment, however, we have to do our duty and explain what Blockchain and cryptocurrencies really are and that they hide and contain more than just green numbers.